ARDA and ARDA-ROC Support Amendments to Florida Timeshare Law

2015-03-20

Issue Brief

ARDA supports proposed amendments (HB 453 / SB 932) to the Florida Timeshare Act which would make much needed revisions to modernize the statute to account for new product structures (i.e. Real Estate Trusts) that were not in use at the time the legislation was first drafted, eliminate duplicative fees owners pay, and establish a procedure for owner objections to proposed substitution of inventory in a multi-site timeshare plan.

Florida’s timeshare statute (Chapter 721—originally enacted in 1983) has regularly been revised to account for changes in the industry such as new product offerings. As the industry evolves, many timeshare products are now being structured as real estate trusts to meet marketplace demand for greater flexibility in both the use of the product and the method of ownership. Most of the changes in the bills reflect this product modernization and address the differences between real estate trusts and other multi-site timeshare plans not accounted for under current law.

HB 453/SB 932 would:

• Provide much needed updates to the existing timeshare statute to account for new product structures. o To address real estate trust product structures and how they will interact with timeshare plans.

• Eliminate a fee timeshare owners now pay twice. This move would save owners approximately $400,000 annually meaning they’d now only be charged once per interest rather than per timeshare plan in which an interest is included.

• Provide a means for owners in older associations to either extend or end their timeshare plan when the plan contains no provisions to do so.

• Add detail to current multi-site disclosure requirements regarding the term of component sites. o The term of each component of a plan must be disclosed rather than only the shortest term.

• Add detail to existing substitution provisions limiting the amount a plan can be changed in a given year. o Adds a new provision that now gives owners an opportunity to object to a substitution.

•Revise requirements for continuity in the operation of a timeshare plan when there is a change in plan management.

Impact

The proposed amendments to the legislation would provide benefits for the timeshare industry at large by clarifying current law to include the operations of timeshare plans organized as real estate trusts, which are not currently addressed in the statute. Additionally, the bills propose to make a number of changes that would potentially save owners hundreds of thousands of dollars annually, provide additional detail and transparency to current disclosures and provide new tools for associations.

Position/Call to Action

ARDA and ARDA-ROC support the proposed amendments to Florida’s timeshare legislation filed in HB 453 / SB 932, that aim to benefit the timeshare industry and its owners.

Issue Updates

HB 453 passed the House Government Operations Appropriations Committee on 3/10/15 by 10-0 vote. A provision eliminating a duplicative fee on owners was removed from the bill at the request of the committee due to its negative fiscal impact on the state.

HB 453 passed the House (4/16) and Senate (4/29) by considerable margins. Unfortunately, a provision eliminating a duplicative fee paid by owners in multisite timeshare plans which was removed in the House earlier was also removed in the Senate. The fiscal impact of the change would likely have prevented passage of the bill due to an ongoing budget impasse between the House and Senate. The bill will soon be sent to the Governor. Once received he will have 15 days to act.

Resolution

HB 453 was signed into law by Governor Scott, June 11, 2015. The bill will take effect on July 1, 2015.